CHICAGO (Reuters) - Illinois State Representative La Shawn K. Ford was indicted on Thursday on federal bank fraud charges, with U.S. prosecutors saying that Ford submitted false income information in applying for a credit line.

Ford, 40, is the second state legislator from Chicago to be indicted this year.

In a complaint filed by the U.S. Attorney's Office for the Northern District of Illinois, Ford, a Democrat, was charged with obtaining a $500,000 increase in a line of credit from the failed ShoreBank by submitting false income information.

He also is accused of falsely claiming he was using the money to rehabilitate investment properties on the west side of Chicago. Federal prosecutors said in a news release that Ford instead used bank funds to pay unrelated expenses, including car loans, credit card bills, other mortgages, payments to a Hammond, Indiana, casino and for his 2006 campaign for state representative.

Neither Ford nor his lawyers, Royal Martin and Mason Lloyd, could immediately be reached for comment.

Ford was charged with eight counts of bank fraud and nine counts of submitting false information -- each count carries a maximum penalty of 30 years in prison and a $1 million fine, according to the news release. The indictment also seeks forfeiture of about $832,000.

ShoreBank failed in 2010 and now operates as Urban Partnership Bank.

The indictment comes the same month that another Chicago Democrat, Derrick Smith, was reelected to the state house despite having been indicted for bribery and expelled by the Illinois House of Representatives. Smith has denied the charges.

Chicago and Illinois have a long-standing reputation for political corruption. The previous two governors of the state -- Republican George Ryan and Democrat Rod Blagojevich -- are serving time in federal prisons.

Numerous local, county and state Illinois officials have been charged in recent years with taking bribes, accepting kickbacks or other corruption.

U.S. Representative Jesse Jackson, Jr., a Chicago Democrat and the son of the civil rights leader Jesse Jackson, resigned last week, citing health issues. In his resignation letter, Jackson, who has been treated for bipolar disorder, acknowledged he was the target of a federal probe and in possible plea talks.

Some media outlets, citing unnamed sources, have reported that Jackson is negotiating with the U.S. government on a possible plea deal to settle allegations he misused campaign funds.

The last member of the Illinois House to be expelled before Smith was Frank Comerford, who was ousted in 1905 for naming other members who had taken money from lobbyists. Comerford subsequently was reelected, the Illinois Secretary of State's office said.

(Reporting By Mary Wisniewski in Chicago; Additional reporting by Renita D. Young in Springfield, Illinois; Editing by Leslie Adler)